Economy

Palo Alto, California (Reuters) – Citing a recent uptick in inflation and data showing the U.S. economy and labor market are stronger than previously thought, Federal Reserve Governor Christopher Waller on Monday called for “more caution” on interest-rate cuts ahead. “Whatever happens in the near term, my baseline still calls for reducing the policy rate gradually over the next year,” Waller said at a Shadow Open Market Committee conference at Stanford University’s Hoover Institution, noting that there is “considerable” room for easing the Fed’s restrictive policy rate. The labor market remains healthy, he said, even as labor demand is moderating, and inflation is “in the vicinity” of the Fed’s 2% target. “We are in the sweet spot right now, we got to keep it there, that’s our job,” he said. But after cutting the policy rate by a bigger-than-expected half-of-a-percentage point in September, the Fed should now proceed at a “deliberate pace” as long as the labor market doesn’t deteriorate suddenly and inflation continues to head downward as he expects, Waller said. “I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller said, noting recent revisions in the economic data show households still spending resources and that lower rates may release “pent-up demand” for big-ticket items. “I will be watching to see whether data, due out before our next meeting, on inflation, the labor market and economic activity confirms or undercuts my inclination to be more cautious about loosening monetary policy.” Asked to specify what pace of rate cuts he envisioned with the modifier “gradually,” Waller demurred.”It’s in the eye of the beholder,” he said. “That’s for you guys to figure out.”Recent hurricanes and the strike at Boeing (NYSE:BA) Inc could make job market readings difficult, stripping perhaps more than 100,000 from monthly job gains in October, he estimated. But looking ahead, he predicted, job growth should moderate gradually, with the unemployment rate drifting upward but staying historically low. If inflation rises unexpectedly, he said, the Fed could pause rate cuts; if it falls below the Fed’s 2% target or the job market cracks unexpectedly, the Fed could front-load rate cuts. But if all goes as he expects, “we can proceed with moving policy toward a neutral stance at a deliberate pace” so as to avoid slowing the economy unnecessarily.  More

(Reuters) -Insurer Blue Cross Blue Shield has agreed to pay $2.8 billion to resolve antitrust class action claims by hospital systems, physicians and other health providers alleging they were underpaid for reimbursements, the plaintiffs said in an Alabama federal court filing on Monday.The settlement is the largest ever for a healthcare antitrust case, they added.Blue Cross Blue Shield denied the allegations in a statement, but said it agreed to the settlement and make operational changes to “put years of litigation behind us.”The providers’ lead attorneys, Joe Whatley and Edith Kallas, said in a statement the proposed settlement would “transform” the BlueCard program through which providers submit claims.The agreement is subject to approval from U.S. District Judge R. David Proctor.The health providers first sued in 2012, claiming Blue Cross and its affiliates divided the country into exclusive areas where they did not compete with each other. The lawsuit said the nationwide conspiracy increased the cost of insurance and drove down reimbursements.Under the settlement, Blue Cross will create a system-wide information platform facilitating member benefits, eligibility verification and claims tracking that the attorneys said would lead to more transparency, efficiency and accountability.The settlement will also give providers more contracting opportunities with Blue Cross.Blue Cross will spend hundreds of millions of dollars implementing the non-monetary part of the settlement, the filing said.The settlement covers U.S. healthcare service providers, including hospitals and some doctors, with Blue plan patients between July 2008 and October 2024.The lawyers said they would ask for up to $700 million in legal fees from Blue Cross.Blue Cross agreed in 2020 to pay $2.7 billion to resolve related antitrust claims from commercial and individual subscribers. The U.S. Supreme Court upheld that deal in June. More

The joint venture operates 324 retail sites and petrol stations across Switzerland.”This transaction marks significant progress in delivering on our commitment of over $3 billion in divestitures,” Phillips 66 (NYSE:PSX) CEO Mark Lashier said in a statement.The company said it would receive $1.17 billion as sales price and $70 million as assumed dividend for the current year to be paid at or prior to closing.Phillips 66 had said last year it would monetize $3 billion in non-core assets in 2024 as part of a plan to boost returns by cutting costs and assets.The company last month sold its natural gas gathering and processing assets in East Texas to Voyager Midstream.Earlier this year, it agreed to sell 25% stake in the Rockies Pipeline, which would provide it $685 million in after-tax proceeds.The refiner said on Monday proceeds from the transaction, which is expected to close in the first quarter of 2025, “will support the strategic priorities of Phillips 66, including returns to shareholders.” More

The cosmetics maker projected sales growth on a like-for-like (LFL) basis of between 4% and 5% for the three months ended September, compared to 6% it previously forecast.Coty said very tight order and inventory management by retailers resulted in weakness in certain markets such as the U.S., Australia and China.The company and rivals including Estee Lauder (NYSE:EL) and L’Oreal have signaled strained consumer spending for beauty and cosmetics products, widely considered an affordable luxury and recession-proof.Coty now expects second-quarter LFL sales to grow moderately with some acceleration in the second half of the year.The company said it was re-accelerating its cost-reduction efforts to deliver savings well above the initial target of about $75 million in fiscal 2025 in anticipation of “a more uncertain demand backdrop, including cautious retailer behavior and a complex macroeconomic environment.”The company, which maintained its annual core profit target, will report first-quarter results on Nov. 6. More

(Reuters) – A look at the day ahead in Asian markets. While Chinese shares did not quite know how to react to Beijing’s weekend stimulus update, Wall Street extended its breakneck rally to give Tokyo something to key off when it reopens on Tuesday from a three-day weekend.While the Treasury market and U.S. government offices were closed on Monday for America’s Columbus Day holiday, the S&P 500 and Dow roared to record high closes led by chip stocks and high hopes for the third-quarter earnings season that kicked off in earnest on Friday with beats by JP Morgan and Wells Fargo.On Tuesday, other big money-center banks including Citi, Bank of America and Goldman Sachs report quarterly results. Later this week, earnings from American Express (NYSE:AXP), Netflix (NASDAQ:NFLX), United Airlines and Procter & Gamble (NYSE:PG) will show any resilience in consumer spending, which dominates U.S. economic activity, before the release of retail sales data on Oct. 17, the main indicator for U.S. investors this week. The dollar index hit its highest since mid August in holiday thinned trade, buoyed by the conviction that the Fed would choose its smaller rate cut option next month, given that the economy continues to grow and create jobs, without overheating. The dollar may have been the only safe-haven beneficiary of China’s “Joint Sword 2024B” war games around Taiwan, which the Pentagon called “destabilizing” on Monday. Gold and crude ended down. The U.S. rate futures market has priced in an 87% chance the Fed will ease by 25 bps at the November meeting, and a 13% chance it will pause and keep the fed funds rate at the target range between 4.75% and 5%, where it has stood since last month’s outsized 50-basis-points cut. The greenback also rose against the onshore yuan after investors found China’s weekend announcements that it would increase debt to revive its economy fell short on detail.  The yuan ended at its low for the day at 7.09 per dollar, also its lowest since Sept 19. It is down about 1% against the dollar since Sept. 24, when the People’s Bank of China kicked off China’s most aggressive stimulus measures since the pandemic.The dollar closed in on 150 yen, ending Monday up about half a percent as the Japanese currency continued to grind lower.MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.02% lower late on Monday, with trading in Asia thinned by Japan’s holiday and a weaker Hang Seng Index close offset by rallies in the CSI300 blue-chip index and Shanghai Composite Index.Numerous U.S. listed shares of Chinese firms fell on Monday, including ADRs from Alibaba (NYSE:BABA), PDD Holdings, NIO and Baidu (NASDAQ:BIDU). The S&P 500 ended up 0.77%, the Dow up 0.47% and the Nasdaq 0.87%, with the Philadelphia Semiconductor Index up almost 2%. Shares of Nvidia (NASDAQ:NVDA) closed at record highs, putting the heavyweight AI chipmaker on the brink of dethroning Apple (NASDAQ:AAPL) as the world’s most valuable company.  All that leaves signals positive, although not uniformly so, for Tokyo’s Nikkei to keep the party going, top Friday’s two-week high and extend the already 27% advance since it bottomed in early August.Here are key developments that could provide more direction to markets on Tuesday:- Japan industrial production (Aug)- South Korea unemployment (Sept)- Citi, Bank of America, Goldman Sachs report Q3 earnings More

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The terms of Cycle Pharma’s proposal are “economically identical” to the previously evaluated and rejected offer, Vanda said in a statement.WHY IT’S IMPORTANTCycle Pharma’s $8 per share proposal is an 80% premium to Vanda’s last closing price, valuing the company at $488 million.The potential offer follows a 4.5% fall in Vanda’s shares after the U.S. Food and Drug Administration declined to approve its drug for a stomach condition that disrupts digestion.Vanda in June rejected the first takeover offer from Cycle Pharma and a revised bid from contract manufacturer Future Pak.CONTEXTVanda in April adopted a shareholder rights plan, known as a “poison pill”, to reduce the likelihood of a hostile takeover.Vanda has three approved products, sleep disorder treatment Hetlioz, Fanapt for bipolar I disorder and Ponvory to treat multiple sclerosis.KEY QUOTEVanda said its board of directors carefully reviewed the second proposal and “unanimously determined that it substantially undervalues Vanda and is not in the best interests of the Company and its stockholders.” Accordingly, the board has determined not to pursue the proposal.”We stand ready to work immediately with Vanda’s board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all Vanda shareholders,” Cycle Pharma said in a statement.MARKET REACTIONShares of Vanda are up 11.37% at $4.95. More

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